This article is sponsored by SustainCERT.

The increasingly dire climate crisis demands immediate action in carbon markets — yet mounting red tape is slowing progress. After experiencing the hottest summer in recorded history, the science is clear that we’re in a climate emergency. 

Yet many of us committed to climate action in carbon markets are not moving fast enough. To ensure carbon markets channel finance into real projects and deliver the climate action it was created for, we must drive greater integrity and transparency. 

The good news is that we have a chance to deliver this — if we dare to think differently. We need a more practical and scalable mindset across the climate ecosystem to create the solutions we need. 

The value of improving carbon markets

This year started off with a renewed analysis and criticism of voluntary carbon markets, causing many companies to lose confidence. We have seen the market shrink for the first time in seven years, with the number of carbon credits used by companies reducing by 6 percent in the first half of the year alone. 

Effective carbon markets are a vital component of a net-zero transition. Despite their flaws, they remain powerful tools to catalyze climate finance at scale — in particular for projects with limited funding opportunities, such as clean cooking. To get rid of carbon markets because they are imperfect and have been misused would be to deny a huge potential for positive impact. 

Carbon markets need fixing, and a rethink of how carbon credits are used across voluntary or compliance market is essential. We already have the foundations for what’s needed, and must focus on two key areas: increased integrity and transparency in the market, and greater pace and collaborative solutions from key players in the ecosystem. 

Scaling carbon markets with technology

Stronger trust in a market brings more investment which make climate action projects more scalable. Trust comes from data and credible sources that reinforce quality. Technology is key — improving accuracy, reducing errors and ensuring data is timely.

During my time as CEO of leading carbon standard The Gold Standard, I realized that third-party verification was a key bottleneck for the supply of high quality credits and scaling the market with integrity. Since 2018, I have been focused on digitizing this process, convinced digital technologies can help increase the accuracy and speed at which climate impact can be verified, and therefore trusted. I have spent considerable time persuading the market and investors on the need for the verification industry to invest in its digital transformation — one of the few sector that hasn’t done so yet. 

In 2023, I am pleased to see a growing consensus on the need to transition from conventional monitoring, reporting and verification (MRV) to digital monitoring, reporting and verification (D-MRV) systems to underpin future carbon markets. The question these days is much less focused on why D-MRV should happen, and more on when. There are still a number of barriers before we can make D-MRV a reality, though — and most of them aren’t tech related. 

Greater collaboration enables D-MRV

Recently, I spoke to other nature tech CEOs on my "How to Net Zero" podcast, and we agreed that our biggest hold back was that we are ahead of the m